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Analysis

Foundations Pay $6M to Settle Allegations of Enabling Medicare Kickbacks

By John Commins  
   October 28, 2019

Chronic Disease Fund, Inc., and Patient Access Network Foundation allegedly worked with drug makers to funnel money to Medicare patients taking drugs the companies sold.

Two foundations will pay a combined $6 million to settle allegations that they enabled pharmaceutical companies to pay kickbacks to Medicare patients, the Department of Justice said.

The foundations – Chronic Disease Fund, Inc. doing business as Good Days from CDF, and Patient Access Network Foundation – will pay $2 million and $4 million, respectively, to resolve the alleged violations of the False Claims Act, federal prosecutors in Boston said.

The government alleged that the two foundations worked with several drug makers to design and operate funds that funneled money from the companies to patients taking the specific drugs the companies sold.

"These schemes enabled the pharmaceutical companies to ensure that Medicare patients did not consider the high costs that the companies charged for their drugs," DOJ said. "The schemes also minimized the possibility that the companies' money would go to patients taking competing drugs made by other companies." 

Federal prosecutors said that, from 2010 through 2014, CDF conspired with five pharmaceutical companies – Novartis, Dendreon, Astellas, Onyx, and Questcor – to pay kickbacks to Medicare patients taking their drugs.

 Prosecutors also allege that, from 2011 through 2014, PANF permitted four pharmaceutical companies – Bayer, Astellas, Dendreon, and Amgen – to use PANF as a conduit to pay kickbacks to Medicare patients taking their drugs.

The settlements were determined based on analysis of each foundation's ability to pay.

The Anti-Kickback Statute bans drug makers and third-party co-pay foundations from paying any remuneration to induce Medicare patients to purchase the companies' drugs.  

Andrew E. Lelling, U.S. Attorney for the District of Massachusetts, said the government's allegations made plain that "CDF and PANF functioned not as independent charities, but as pass-throughs for specific pharmaceutical companies to pay kickbacks to Medicare patients taking their drugs."

"As a result, CDF and PANF enabled their 'donors' (the pharmaceutical companies) to undermine the Medicare program at the expense of American taxpayers," Lelling said.

“CDF and PANF functioned not as independent charities, but as pass-throughs for specific pharmaceutical companies to pay kickbacks to Medicare patients taking their drugs.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Photo credit: Mark Van Scyoc / Shutterstock.com


KEY TAKEAWAYS

CDF allegedly conspired with five drug makers – Novartis, Dendreon, Astellas, Onyx, and Questcor – to pay kickbacks to Medicare patients taking their drugs.

PANF alleged let four drug makers – Bayer, Astellas, Dendreon, and Amgen – to use PANF as a conduit to pay kickbacks to Medicare patients taking their drugs.

The settlements were based on analysis of each foundation's ability to pay.


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